| WASHINGTON, April 26
WASHINGTON, April 26 U.S. securities regulators
plan to propose a long-awaited plan next week spelling out how
new rules governing over-the-counter derivatives will apply to
The Securities and Exchange Commission announced it will
vote on Wednesday on its proposal, which runs roughly 1,000
pages. The SEC will also extend the comment period for all of
its other pending derivatives proposals so the industry can see
how they all fit together with the cross-border plan.
Regulators in Europe and the United States disagree on how
to craft a global regime that will not create duplicative rules.
Wall Street will be eager to do a side-by-side comparison of
the SEC's proposal with the cross-border draft issued earlier by
its sister regulator, the Commodity Futures Trading Commission.
The 2010 Dodd-Frank Wall Street reform law gave the SEC and
CFTC broad new powers to police the $640 trillion
over-the-counter derivatives market.
The SEC oversees swaps tied to securities, such as equity
swaps and certain credit derivatives. The CFTC oversees
everything else, including interest-rate and commodity swaps.
The Dodd-Frank law requires both regulators to impose
capital and margin charges for riskier trades, and to force many
swaps to be traded on regulated platforms and centrally cleared
to reduce default risk.
The CFTC, which regulates the lion's share of the market,
created a furor last year with a proposal to subject foreign
banks to the same rules as U.S. banks. Foreign regulators have
called on the United States to let them apply their own rules
when the trades are on their turf.
CFTC Chairman Gary Gensler has said he would be open to
"substituted compliance," but only to a certain extent.
Recently, SEC Commissioner Elisse Walter, who briefly served
as chairman before Mary Jo White was sworn in earlier this
month, called for a compromise where foreign rules would apply
in some cases and U.S. rules in others.
"In my view, that happy medium has its foundation in an
approach that recognizes comparable foreign regulation to the
maximum extent possible, consistent with domestic policy goals,"
Walter said at the time.